Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 Index called to open +30pts at 7265, maintaining a shallow uptrend towards 7300 since Monday, but in a bearish rising wedge that could yet see the uptrend scuppered. Bulls need a break above 7275 overnight highs to extend the uptrend; bears want to see a troubling of rising lows around 7245 to put the uptrend in jeopardy. Watch levels: Bullish 7275, Bearish 7245

Calls for gains at the open come after solid gains on Wall St and a largely positive session for Asian markets (ex-China and HK for Lunar New Year) as global volatility continues to ease, back below its long-term average of 20, and equities maintain their recovery course.

Japanese stocks are higher despite a stronger Yen, after BoJ Governor Kuroda was nominated for a second term, while further USD weakness (meaning stronger GBP and EUR) helps commodities like Oil and Gold. However, Australia’s ASX is the odd one out, in the red with Miners and Financials under water, the former having a potential negative knock-on for the UK Index .

Corporate news this morning: Balfour Beatty wins $1.95bn JV build-and-maintain contract (30% stake) for 6 station rail system at LAX airport. Rio Tinto working with Oyu Tolgoi Partners (Mongolia) to deliver power source within 4yrs; $250m/yr already earmarked in 2019/20 CAPEX. Segro FY adj. pre-tax profits +25.7%, EPS +5.9% (diluted by rights issue), NAV + 16.3%, final dividend +6.1%, early 2018 occupier demand strong across all markets.

Petropavlovsk CFO Stands Down. Hummingbird Resources says ramp-up on track and exploration commenced at Yanfolila Gold Mine, Mali. CVS plans 10% fundraising at 14% discount, using proceeds for acquisitions ($40m pipeline identified) and debt repayment.

US equity markets extended their winning streak to five days overnight, with the three major indices once again rallying over 1% a piece. The Dow Jones climbed 1.2% as Boeing provided more than double the gains of any other stocks with just three closing in the red, while Tech and Utilities launched the S&P 500 1.2% higher, outperformance in the former seeing the Tech-heavy Nasdaq outperform peers, up 1.6%.

Gold has broken above $1357 resistance as the US dollar extends its decline. The precious metal is trading a fresh 3-week high as the global reserve currency falls to a fresh 3-year low. Despite retreating from overnight highs of $1360, former resistance at $1357 is proving supportive. This afternoon, US Import Price Index will be the final US inflationary print that could influence USD.

Crude Oil benchmarks have climbed higher overnight, bouncing from intersecting support yesterday afternoon, however remain hindered by January falling highs resistance. Global benchmark Brent touched $65 before retreating marginally from its highs, off yesterday’s $63.4 lows, while US crude has dipped from $61.8 from yesterday’s lows of $59.7.

In focus today, with UK inflation blowing too hot and Bank of England primed to hike in May, will be UK Retail Sales (9.30am), forecast to have rebounded in January (0.6% vs -1.6% prev.) from a weak December (blame frontloading of big Christmas purchases around November’s Black Friday). The pick-up in annual growth (2.4% vs 1.3% prev.) will only add to the pressure on the BoE.

This afternoon, US Housing Permits and Starts (1.30pm) are expected to show the former having risen in January but the latter unchanged, before the latest stateside inflation metric - Import Prices (1.30pm) - shows a monthly increase (0.6% vs 0.1% prev.) but unchanged annually (3%).

While scheduled speakers today are limited to the ECB’s Coeure (8:20am) at the Reinventing Bretton Woods Committee International conference, today is the opening day of the Munich Security Conference, with attendees including UK PM May, NATO Chief Stoltenberg, Israeli PM Netenyahu and a range of major corporate Chief Security Officers (including Alphabet and Facebook).

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